UK votes in favour of Brexit delay

MPs in the UK House of Commons voted in favour of extending the March 29 Brexit deadline, by a margin of 412-202.

In effect, the vote supports a delay of Brexit to the end of June, provided that the House throws their support behind Prime Minister Theresa May’s twice-rejected deal. Though now a higher likelihood, this is isn’t consider a sure thing, even despite some Brexiteer MPs showing signs of crumbling under mounting pressure from Bremainer forces.

Complicating matters, and stifling optimism in the market, this morning’s vote isn’t legally binding, and requires, essentially, ratification from the EU – an outcome that is not necessarily assured, either. Hence, a no deal is still on the table, and means that many of the same uncertainties that existed before this week’s round of voting, for market participants, remain.

The Labor opposition appear now to be turning the proverbial screws in their bid to destabilize the Tories, calling for a second referendum on Brexit, although what shape this may take hasn’t been defined. Another complicating factor is what an extension will mean for the UK and EU parliamentary elections at the end of May.

Overall, what has come out of Brexit this week is a delay, and perhaps a simple prolonging of pain for the UK, Europe and financial markets. All the risks, while shifting shape, are all still present in one form another. The sterling has reflected this dynamic: it’s pulled back this morning from the top of its stubborn range.